Taiwan’s economy surged 7.96% in Q2 2025, accelerating from 5.48% in Q1, according to an advance estimate. This marked the fastest expansion in four years and sharply exceeded market expectations of 5.7%, primarily driven by robust exports and capital formation. Gross capital formation rose 5.56% (vs. 15.98% in Q1 2025), supported by investment in machinery, construction, transport equipment, and intellectual property. Real private final consumption edged up 0.56% (vs. 1.36%), supported by spending on food, beverages, and services such as entertainment and transportation. Government consumption increased 2.85% (vs. 0.44%), contributing 0.37 percentage points to overall GDP growth. Exports of goods and services surged 35.10% (vs. 20.29%), fueled by strong global demand for artificial intelligence (AI) and emerging technologies, while imports rose 31.95% (vs. 24.43%). On a seasonally adjusted annualized basis, GDP growth accelerated to 12.89% in Q2, up from 7.25% in the previous quarter.